4123.61, R.C. 4123.62, R.C. 4123.56(A), R.C. 4123.03
Percy, Chief of Operational Policy, Analytics and Compliance (Signature on
policy or procedure, memorandum or directive regarding wages that predates
the effective date of this policy.
purpose of this policy is to ensure BWC calculates the full weekly wage (FWW)
and the average weekly wage (AWW) consistently and in compliance with the law.
policy applies to all BWC Field Operations staff.
Allowances: Payments of a
set amount made to an employee at given intervals for a specific purpose. Allowances
are paid without requiring proof that the employee spent the allowance monies
on the specific purpose. Common types of allowances include payment for travel,
uniforms, laundry and housing.
weekly wage (AWW): The
basis upon which to compute benefit payments for: temporary total disability
(TT) and Living Maintenance (LM) after the initial 12 week period of disability;
death benefits; permanent total disability benefits (PTD); percent of permanent
partial disability benefits (%PP); wage loss (WL) benefits; and may be used for
payment of living maintenance wage loss (LMWL) if greater than the FWW.
The 52 weeks prior to the date of injury (DOI) or date of disability in
occupational disease claims (DOD), excluding periodsof unemployment beyond the IW’s
For purposes of this policy, best available evidence is defined as the more
detailed earnings information for the earning period (e.g., a payroll report
from the employer is better evidence than a W-2).
made to an employee by an employer, which are in addition to regular earnings.
money set-aside from earnings that is generally used for employee contributions
towards health care, life insurance or daycare.
compensation deductions: Deductions the employer makes from an employee’s
pay that the employee can receive at some later date.
compensation account disbursements: Retirement income paid from previously
of time used to identify earnings to be included in the FWW and AWW wage
calculations. Earning periods are generally based on full pay periods prior to
the DOI or DOD (e.g., 52 full weekly pay periods).
contributions to employee health care plan: Payments made by the employer
toward the purchase of a health care plan for the employee
child care payments: Payments made to foster parents to cover the costs
of care for a foster child.
of earnings: Schedule
on which pay is received (e.g., weekly, biweekly, monthly).
weekly wage (FWW): Basis
for payment of compensation for the first 12 weeks of TT or LM and may be the
basis for LMWL if it is greater than the AWW.
The FWW is based on the IW’s earnings for the six weeks and/or seven days prior
to the DOI or DOD.
maintenance wage loss (LMWL): Compensation paid to an IW who has
completed a vocational rehabilitation program and returns to employment, but
suffers a wage loss compared to the wage the injured worker was receiving at
the DOI or DOD.
wage loss (NWWL):
The dollar amount of the diminishment in wages sustained by a claimant who has
not returned to work because he or she has been unable to find suitable
employment. The extent of the diminishment must be the direct result of
physical and/or psychiatric restriction(s) caused by the impairment that is
causally related to an industrial injury or occupational disease.
Payments made by the employer to the employee as a daily expense allowance.
Reimbursements: Payments made
to an employee based on actual cost to the employee, and may require the
submission of receipts to the employer (e.g., travel, uniforms, laundry and
For purposes of this policy, regular earnings are defined as the hourly rate
times hours worked or a regular salary.
to an employee who has left employment due to reaching a specific age, or
specific number of years of service, or at the election of the employee.
income (income after expenses) an individual earns in association with certain
types of solely-owned or partially-owned businesses.
Pay given to an employee upon termination of employment.
security benefits: Payments
made by the Social Security Administration to an individual because of
retirement, death or disability.
for daily living expenses paid by the employer.
given by a patron to a servant, waiter, or other similarly related individual
for services rendered.
total (TT): Compensation
paid to an IW who is unable to return to the former position of employment on a
temporary basis due to the work-related injury or occupational disease and who
has not been found to have reached maximum medical improvement (MMI).
Benefits paid by the Department of Job and Family Services to an individual
who has lost employment.
from an employer to an employee for a break or holiday from work.
wage loss (WWL):
The dollar amount of the diminishment in wages sustained by a claimant who has
returned to employment which is not his or her former position of employment.
However, the extent of the diminishment must be the direct result of physical
and/or psychiatric restrictions caused by the impairment that is causally
related to an industrial injury or occupational disease.
A. It is the policy
of BWC to calculate the FWW and AWW in a claim based on the best available
1. It is the
responsibility of the IW to provide earnings information for the calculation of
2. BWC shall request
detailed earnings from the IW and employer of record for the 52 fully paid weeks
prior to the DOI or DOD. Evidence of earnings includes, but is not limited to:
a. Payroll reports
from an employer;
b. Copies of check
c. Income tax
returns signed by the IW or signed by other person who prepared the taxes;
d. W-2s for the
year of and/or year prior to the DOI or DOD;
e. 1099 forms for the year of
and/or year prior to the DOI or DOD when accompanied by a Injured Worker Earnings
Statement (Wages-IW) form or equivalent statement regarding expenses;
f. Social security
reports of earnings that include the IW’s name;
g. Employer Report
of Employee Earnings
(Wages-Emp) form signed by the employer;
h. Wages-IW form or
equivalent signed by the IW.
requires wages being reported as income to also have been reported to the IRS.
BWC suspects that wages reported as income have not been reported to the IRS,
BWC may notify the IRS of any discrepancy (e.g., rental income, S-Corporation
profits and partnership profits).
3. BWC shall attempt to calculate
a. In all lost time
b. When a claim
changes from medical only (MO) to lost time (LT); or,
c. Upon receipt of an
Application for Percent of Permanent Partial Impairment or Increase in
Percent of Permanent Partial Impairment (C-92) application.
4. BWC will set
both the FWW and the AWW when setting wages for compensation other than
percentage of permanent partial impairment (%PP).
5. When setting the
AWW for the purpose of paying %PP:
a. BWC shall set
the FWW and the AWW when detailed earnings information is available; or,
b. BWC shall set
only the AWW when detailed earnings are not available.
B. BWC shall
include the following earnings in calculation of wages, however the list is not
1. Gross regular
earnings, before deductions such as deferred compensation, Cafe 125, etc.;
earnings (e.g., Form 1040 Schedule C);
5. Bonuses related
to direct and active participation in employment during the earnings period
(e.g., performance bonus);
6. WWL or LMWL paid
in a prior workers’ compensation claim (in addition to earnings from an
7. Per diem or
8. Vacation, sick
leave, and holiday pay for periods which fall within the earnings period;
9. Lump sum payouts
for vacation, sick, personal or other leave is included for AWW calculation
10. Farm income
(e.g., Form 1040 Schedule F);
reported on the IW’s federal income tax return that are specifically subject to
either social security withholding, Medicare withholding, or self-employment tax
(e.g., housing allowance);
specifically subject to self-employment tax (Schedule SE);
13. Payment received
in lieu of receiving health insurance.
C. BWC shall
exclude the following in the calculation of wages:
unrelated to work activity (e.g., shareholder bonus);
from previously deferred compensation;
benefits paid from social security or other retirement programs;
contributions to employee health care plans;
5. Payment received
for foster care of children;
6. NWWL paid in a
prior workers’ compensation claim;
for items such as travel, uniforms, etc.;
8. Temporary total
compensation or salary continuation, including occupational injury leave (OIL),
paid in a prior claim;
10. Severance pay;
11. Other forms of
income reported on an IW’s tax return that are not subject to social security
withholding, Medicare or self-employment tax, including, but not limited to:
a. Interest income;
b. Dividend income;
c. Taxable refunds
of state and local income taxes;
e. Capital gains;
f. Other gains
reported on Form 4797;
i. Income reported
on Schedule E (including, but not limited to, rental real estate, royalties,
partnerships, S corporations, trusts);
j. Social security
k. Other income not
subject to self-employment tax (Schedule SE);
benefits and setting wages
1. Periods during
which an injured worker receives unemployment benefits are generally excluded
from AWW calculation;
2. Seasonal workers
must demonstrate that they were looking for work during periods of
unemployment. Examples of ways an injured worker may demonstrate that he/she
was looking for work include:
a. A signed
statement on the Wages-IW form or its equivalent which describes the job search
activity, including type of work sought and method of job searches: or
b. Copies of
confirmation from on-line job searches; or
c. Copies of
correspondence with potential employers, job applications, resumes or other
evidence of contact with employers.
3. Weeks during
which an IW participated in job training or job seeking skills training for
which they were paid will be excluded and the payment will be excluded. This
does not include periods of job training with an employer.
4. Periods during which
the injured worker received partial unemployment benefits while working, and
the earnings for those periods, will be excluded if the injured worker provides
evidence that s/he continued to seek work to return to full employment during
that period in an attempt to discontinue receipt of the partial unemployment
E. Calculating the
1. For IWs who have worked a least
one full week prior to the DOI or DOD, the FWW is the higher amount of:
a. The gross earnings, including
overtime pay, for the six weeks prior to the DOI or DOD, divided by six; or
b. The gross earnings, excluding
overtime pay, for the seven days prior to DOI or DOD.
2. For IWs who have not worked at
least a full week during the six weeks prior to the DOI or DOD, the FWW is set
at the hourly rate multiplied by the number of hours the IW was scheduled to
work the week of DOI or DOD.
3. No weeks are excluded from the
calculation of FWW. The total earnings for the six weeks prior are
divided by six, even if there were weeks with no earnings.
4. BWC shall set
the FWW equal to 1/3 of the statewide average weekly wage (SAWW) for the DOI or
DOD in order to pay the first 12 weeks of TT or Living Maintenance if the IW
was employed during the applicable earnings period and no earnings information
F. Calculating the
1. The AWW is
calculated by dividing the total earnings for the 52 weeks prior to the DOI or
DOD by 52 minus any weeks which should be eliminated.
2. Periods of unemployment due to
reasons beyond the IW’s control shall be eliminated from the calculation.
Documentation is required to support eliminating weeks from the
calculation. Reasons to eliminate weeks include, but are not limited
a. Sickness of the IW or a family
member whom the IW had to care for;
b. Pregnancy or parental leave of
the IW, excluding an extended period based on the IW’s choice instead of
c. Industrial depression;
d. Strike or lockout;
e. Disability related to a prior
workers’ compensation claim;
f. Non-working wage loss
compensation was paid in a prior workers’ compensation claim;
g. IW was unemployed, but was
seeking employment (note additional requirements for seasonal workers in
section D.2 above);
h. IW is new to the
work force (i.e., the IW recently graduated from high school or college).
3. If the IW has
not worked for reasons within her/his control (e.g., IW stayed home to care for
children or to go to college), those weeks are not excluded from the
4. If the IW
presents special circumstances that make the method described in the wages policy
and procedures unfair, field staff may use alternative methods for setting
wages to provide substantial justice.
5. BWC shall apply
special circumstances when setting the AWW when it is appropriate. Examples of
situations where special circumstances may be applied include:
a. IW was new to
the work force;
b. IW was
self-employed and suffered a loss of earnings due to an unsuccessful business;
c. IW was a
6. BWC shall set
the AWW equal to 1/3 of the SAWW for the DOI or DOD in order to pay TT or
Living Maintenance (LM) after the first 12 weeks or permanent total disability
(PTD) if the IW was employed during the applicable earnings period and no
earnings information is received.
a. BWC will not set
wages without earnings information solely for the purpose of paying percentage
of permanent partial impairment awards as there is no minimum award for this
b. BWC will not set
wages without earnings information for the purpose of paying wage loss or
living maintenance wage loss as earnings information is required to prove loss
of earnings to be eligible for these benefits.
c. If wages have
been set at 1/3 of the SAWW for the DOI or DOD, BWC may reset wages upon
receipt of earnings information.
7. If the only
earnings information received is hours scheduled multiplied by the hourly rate,
and TT or LM after the first 12 weeks or PTD is payable, BWC shall set the AWW equal
to 1/3 of the SAWW for the DOI or DOD.
G. When it is
within BWC’s jurisdiction, BWC shall issue an order to set or reset wages in a
1. BWC shall set the
initial wages in a claim.
2. BWC shall reset
wages in a claim unless the IC has previously ruled on setting of wages.
a. BWC shall re-evaluate
wages upon receipt of a
request to reset wages on a Motion (C-86) or other correspondence which
is accompanied by new evidence that is better than that which was used in the
prior calculation of wages.
i. If BWC’s
evaluation results in a new amount an order shall be issued to reset wages.
ii. If BWC’s
evaluation results in no change in amount, BWC shall issue an order to deny the
request to reset the wages.
iii. If a request is
filed and the accompanying evidence is not better than the evidence previously
used to set wages, BWC shall issue an order to deny the request to reset wages.
b. BWC may issue an
order to reset wages when an error in the prior calculation is discovered.
H. Requests to
reset wages in claims where the IC has previously ruled on the setting of wages
shall be referred to the IC with BWC’s recommendation regarding the resetting
I. BWC will adjust
previously paid compensation when wages are reset and a BWC or IC
order has been issued which includes language that orders the adjustment of
previously paid compensation.
1. When an
adjustment to wages is made based on a request from a party to the claim and
the result of the adjustment is that additional payment is due the IW, the
adjustment will be limited to compensation paid within the two years prior to the
filing date of the request.
2. When an adjustment
to wages is made by BWC without a request from a party to the claim and the
result of the adjustment is that additional payment is due the IW, all
compensation paid in the claim will be adjusted.
3. All compensation
paid in the claim will be adjusted when the change in wages results in the IW being
amount of the overpayment
will be determined after the order
to reset the wages is final. See Overpayment of Compensation policy for
information regarding declaring and collecting overpayments.
BWC staff may
refer to the corresponding procedures for this policy entitled “Procedure for
Wages” for further guidance.